The main reason why you should go for short term loans is the convenience in making repayments. This is so because the overall repayment amount is spread over a number of months and you are only required to settle small portions on the agreed installments until your clear your debt. Short term installment loans work great for those who have small incomes to make it easier for them to honor their debts.
These loans are characterized by:
No collateral- most lenders will easily give you the cash you need without requiring you to pledge collateral on short term installment loans. The main reason they do this is because most people borrow the loans to attend to some needs that require just some little amount of cash. Even without collateral, the risks in giving out such an amount are very low even if the borrower fails to clear his debt. However, the terms & conditions allowed are very strict.
Short repayment periods- although the borrower is allowed to make repayments in installments, the repayment period still remains short and this can at times even be three months. You should therefore take time to evaluate the repayment periods for your loan to ensure that you can conveniently handle such. This will help you to have some easy time making repayments and avoid any financial hitches when doing so.
Higher interest rates- compared to long term loans, short term installment loans will definitely cost you more and this is caused by some simple reasons like:
• The funds are offered without collateral
• The funds are availed almost instantly
• The amount given is usually small
You can significantly reduce the overall repayments that you will make on the loans by finding several lenders and then comparing their offers. However, you should take time to know more on lenders whose quotes reflect unrealistically low interest rates as some can do this to entice you to go for their loans. Others will allow you some very low rates but will later reveal other charges after the deal is on.
To avoid any surprises when making repayments, you should ensure that everything in the fine print provided is clear more so when it comes to terms and conditions. If you find anything suspicious, you should consult the lender or simply move ahead to find a lender with clear terms & conditions.